Niche Marketing Tactics

Leading at Light Speed is an excellent leadership book by Eric Douglas showing you step-by-step how to implement 10 Quantum Leaps that build trust, spark innovation, and create a high-performing organization. Chapter 2, titled Sharpen the Focus, illustrates Eric Douglas’ idea of Niche Marketing Strategies.

A lesson can be learned from a simple cartoon that seeks to illustrate one of many reasons you should sharpen the focus. The cartoon shows a large fishing net. A very large fish swims on one side of the net. On the other side swims a school of small fish. There is a caption that say: ” “Attention all fish: How to escape being trapped by a net: “Either get so big you can bust the net, or stay small so you can swim right through.” The lesson? It’s dangerous to be a medium-sized fish.

Niche and Grow Rich is a book that illustrates how online e-commerce has created an explosion in small, niche businesses. The authors describe a man who made a successful business selling unicycles online. They talk about the huge number of online jewelry vendors – “digital gypsies.” Whether you have an interest in garden railroads or traveling by barge through France, there’s a niche company (or several of them) to serve you.

A sharply focused niche company enjoys several strategic advantages:

1. It can start small and stay small while maintaining an attractive profit margin.
2. Because of its size, it can adapt quickly to changes in the market and offer cutting-edge services and products that a larger competitor cannot.
3. It can be an attractive “roll-up” opportunity for an investor (who wants to combine several niche players), thus providing a handsome financial return for the founder-owners.

But there are downsides to niche companies, too. Personality conflicts can wreak havoc on small companies. The lack of defined business processes can make it expensive to find the right people to sustain the business once the founder leaves. The lack of objective marketing data may leave them vulnerable to shifts in consumer taste. I’m also struck by the fact that if all you’re doing is selling unicycles, you’d better love unicycling.

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